Settling a Dispute With a Management Company: Disgruntled Residents Take Back Control of Their Buildings

A growing number of dissatisfied residents in leasehold properties are taking up their legal ‘Right to Manage’, which allows them to take on the responsibilities of management of their homes.

Exploring ‘Right to Manage’: what rights do leaseholders have?

Approximately five million people in the UK live in leasehold properties. As the leasehold sector is unregulated, anyone can decide to become a freeholder or to take over management. Right to Manage lets leaseholders take over the management of their building: the right to manage is often obtained through an agreement reached with the freeholder that sees the management taken over by an appointed company. In other cases, residents have the right to demand the transfer of the management functions by their company of choice.

A Right to Manage company takes on all the management responsibilities of the building, which include undertaking building maintenance and collecting service charges.

In addition, as building leaseholders, residents can legally ask for detailed summaries of the cost of services and building maintenance and can demand that consultation takes place for maintenance and repairs that cost over £250.

‘Right to Manage’ is increasingly popular

The option of taking up a Right to Manage is growing in popularity due to mounting frustrations with the ways in which properties are maintained and serviced by companies.

The senior residents at a Berkshire elderly people’s home, Warner Court in Sandhurst, were growing increasingly unhappy with their building’s management company, FirstPort. Nicola Frith, daughter of a Warner Court resident, uncovered numerous ways in which the firm was letting down its elderly residents. Frith, who works as an accountant, found many instances in which the company had failed to comply with the Landlord & Tenant Act of 1985.

Frith argued that the management company failed to inform residents of work carried out that would result in residents charged £250 or more, on numerous occasions – something that breaks Section 20 of the Act, which holds that residents must be informed of any work carried out that costs in excess of £250. Frith claims that FirstPort broke section 20 in 2008, when they undertook decorating that costed £18,000, as well as in 2014 when they spent £17,000 on furniture, and when they spent £10,000 on plumbing in the same year.

As a result, Frith helped the residents in their legal battle to transfer management to a company of their choice. Residents have been able to reduce their service charges: FirstPort budgeted £63,950 for service charges for the block in 2016, but the Right to Manage company’s revised budget put this figure at £41,699.

‘Right to Manage’ helps residents save

Other leaseholders across the UK are also taking advantage of the ‘Right to Manage.’ Karen Peel helped residents, including her son, take over management at The Pinnacle development in Wakefield, West Yorkshire in 2007. The development was managed by Adderstone when Peel took action, claiming that managers refused to listen or to rectify any issues within the properties.

Residents took over control of the complex in 2012. Peel said: “They are doing a fantastic job. We’ve worked together on a programme of improvement and general repair, and all the tenants and leaseholders are saying how nice it’s looking. It’s a much safer and more secure place to live.”

“We saved £5,000 on buildings insurance in the first year and last year we had over £25,000 left in a reserve fund, which has allowed us to decorate the whole building. We never had a surplus with our previous managing agents.”

Property dispute resolution through mediation

If you are concerned about a property dispute or need the advice of a mediator to settle a dispute between yourself and your management company or landlord, or if you have been adversely affected by the negligence of a property professional such as a surveyor, call us in confidence on 01895 207988 or email propertydisputes@ibblaw.co.uk.